Investing.com – The U.S. dollar struggled to add to gains against its rivals on Friday, as sterling soared on growing expectations the UK will seek to delay its scheduled exit date from the European Union.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.10% to 95.21, but remained on track to post a fourth-straight weekly loss.
Ahead of a vote due Tuesday on UK Prime Minister Theresa May’s Brexit deal, widely expected to be voted down, sterling surged as senior UK lawmakers privately admitted more time is needed even if the prime minister’s deal wins the backing of parliament, the Independent reported.
GBP/USD rose 0.83% to $1.2853, while EUR/USD fell 0.22% to $1.1473.
U.S. consumer inflation, which met economists’ expectations, appeared to stem losses in the greenback even as the data showed the pace of pricing pressures slowed in December.
The Labor Department said its Consumer Price Index fell 0.1% last month, slowing the year-on-year CPI to 1.9% from a pace of 2.2% in November.
Slowing inflation, however, is unlikely to stop the Fed from adopting a slower pace of rate hikes, according to analysts.
“With little indication here that the acceleration in wage pressures or tariffs are causing any pickup in inflation, the Fed can take a pause in Q1 on raising rates to assess the health of growth indicators,” CIBC said in a note to clients.
Elsewhere, USD/CAD rose 0.25% to C$1.3267 as the loonie was pressured by falling oil prices on the back of profit taking following a relentless rise since the start of 2019.
Elsewhere, the risk-sensitive USD/JPY rose 0.05% to Y108.48.